WISCONSIN LEGISLATIVE AUDIT BUREAU
Wisconsin Works (W-2) Program
The Wisconsin Works program, more commonly known as W-2, was created by 1995
Wisconsin Act 289 to help participants achieve economic self-sufficiency through
employment. It took effect statewide in September 1997. W-2 participants,
who are primarily women with dependent children, earn wages or receive cash grants and
other program services based on their employment status. Through September 2000, program
costs—which are funded by state general purpose revenue and federal Temporary Assistance
for Needy Families block grant funds—totaled $710.4 million.
Program participants receive services from counties, private agencies, and tribes under
the terms of contracts signed with the Department of Workforce Development (DWD).
W-2 participants are assigned to either subsidized or unsubsidized
placements, based upon their level of preparedness for employment, and are eligible to
receive program services that are intended to assist them in finding or retaining
employment, increasing their skills or wages, and overcoming barriers to employment.
The 1999 Incomes of Most Former Participants Were Below the Poverty Level
It was expected that caseloads would decline in the transition from Aid to Families with
Dependent Children to W-2, but they did so much faster than had been
projected. In three years, the decline was 50.9 percent, from 22,761 in September 1997 to
11,171 in September 2000.
We reviewed the income of all participants who left the program in the first quarter of
1998 and matched this population with those who filed 1999 Wisconsin income tax returns.
Of these 2,129 individuals, approximately two-thirds filed tax returns. Their reported
incomes averaged $11,988. When only this income is considered, 33.8 percent of these
filers were above the federal poverty level for their respective family size, while 66.2
percent were below it. However, the incomes of many of those who filed 1999 tax returns
were enhanced by receipt of state and federal earned income tax credits. If the value of
these credits is included, 46.7 percent of former W-2 participants were
above the federal poverty level in 1999. Those who did not file tax returns presumably
were not required to do so based on their limited incomes, because they were no longer
Wisconsin residents, because they became eligible for Supplemental Security Income, or
because they were supported by a spouse or other adult in the household.
Participants Are Returning to the Program for Assistance
Despite the significant decline in caseloads, there are indications that at least a
portion of former participants are returning to W-2. By July 2000, 26.1
percent of the 2,129 former participants who had left the program during the first three
months of 1998 participated again in reopened cases. Of the 555 cases that were
reopened, 409, or 73.7 percent, returned in a subsidized job placement; 146, or 26.3
percent, returned in an unsubsidized placement in order to receive case management
In July 2000, when Milwaukee County accounted for 85.2 percent of all returning
participants statewide, 42.4 percent of all Milwaukee County participants were returning
participants. Two years earlier, only 2.7 percent of Milwaukee County participants had
been returning participants.
The Number and Amount of Sanctions W-2 Agencies Impose Vary Substantially
W-2 agencies exercise considerable discretion in sanctioning participants’
cash benefits if they miss work or fail to participate in a required activity without
good cause. Overall, the percentage of participants sanctioned has decreased from 31.4
percent of the statewide caseload in October 1999 to 21.1 percent in December 2000.
However, in Milwaukee County the sanction rate has consistently been approximately 10
percentage points higher than in the balance of the state, and four of the five agencies
serving Milwaukee County sanctioned more than 20 percent of participants receiving cash
assistance from October 1999 through December 2000.
Although W-2 was designed to provide flexibility in local program
administration, the wide variation in the number and amount of sanctions imposed has
raised concerns about the equitable treatment of participants. Further, we found several
instances of sanctions being inappropriately applied: at least 35 participants who were
new mothers were inappropriately sanctioned from July through December 2000 because of
errors made by local W-2 agencies. Maximus and Employment Solutions, two
private agencies that serve portions of Milwaukee County, issued the largest inappropriate
sanctions against new mothers, which amounted to more than one-third of these participants’
full monthly benefits of $673.
A Number of Issues Warrant Legislative Consideration
Developing strategies to increase former W-2 participants’ incomes above the
poverty level, addressing the needs of returning participants, and responding to a
possible downturn in the economy will all be important to ensuring the future success
of the W-2 program. In addition, several other issues will warrant
legislative consideration: whether to modify proposed performance standards for the next
contracts with W-2 agencies; how best to address the needs of participants
who are nearing the time limits established for receipt of services; how to ensure all
contract funds are spent appropriately; and whether to consolidate contracts in
Milwaukee County in order to improve performance and provide administrative efficiencies.
full report with appendices, PDF file (756KB)
report only, PDF file (342KB)
appendices only, PDF file (403KB)
These files require
Go to LAB Reports Page
Go back one page